- A letter of demand is not a court document, and receiving one does not mean you have been sued.
- Ignoring it often leads to a court claim, and silence can count against you later.
- Most letters give a short deadline, often 7 to 14 days. You can ask for more time.
- Settlement proposals are usually made 'without prejudice', so they cannot be used against you in court.
What a letter of demand is
A letter of demand sets out a claim against you, says what the sender wants (often payment of money, sometimes that you do or stop doing something), gives a deadline, and warns that legal action may follow if you do not comply. It is usually sent by a lawyer on the sender's behalf, but anyone can write one.
A letter asking you to stop doing something is often called a cease and desist letter. It works in a similar way.
A letter of demand is different from a statutory demand. A statutory demand is a formal insolvency document with a prescribed form. If an undisputed debt above the legal threshold is not dealt with in time, it can lead to bankruptcy or winding up. If the document you received is a statutory demand, treat it as more urgent.
Why letters of demand are sent
Under the Rules of Court 2021, parties are expected to try to settle a dispute before going to court. A claimant generally has to make a written offer of amicable resolution first, unless there is a good reason not to. In practice, a letter of demand is how many claimants meet that duty.
This works both ways. A court deciding legal costs can take into account a party who refused reasonable attempts to settle. That is one reason not to leave a letter unanswered.
Should you ignore it?
No. The letter itself does not oblige you to go to court, and it is not an order. But if you do not reply, the sender may file a claim. If the case reaches court, your silence may be seen as an unwillingness to resolve the dispute.
Ignoring a letter also wastes the chance to put your side early. Sometimes a reply with documents the sender had not seen changes how the dispute is handled.
How to respond
A careful response usually involves these steps:
- Note the deadline. Many letters give 7 to 14 days. If you need more time, for example to find a lawyer, ask for it and say when you will reply. Reasonable requests are usually granted.
- Do not reply in anger, and do not admit anything in writing before you have taken advice.
- Gather the documents: the contract, invoices, delivery records, and messages or emails with the other side.
- Decide on your position. You may agree and pay, agree and propose instalments, or dispute all or part of the claim.
- Put the reply in writing and keep a copy.
Offering to settle: 'without prejudice'
If you want to propose a settlement or a payment plan, make it clear that the offer is 'without prejudice'. This generally means the offer cannot be used as evidence against you if the dispute goes to court. It lets both sides negotiate more freely.
If you offer to pay in instalments, give specific amounts and dates. A clear plan is more likely to be accepted than a general promise to pay.
If the sender does not accept your reply
If the dispute is not resolved, the sender may start a court claim in the court that matches the amount claimed. If you are then served with court papers, strict deadlines apply, and they are much shorter than most people expect.
Getting advice on your situation
Whether to pay, negotiate or dispute depends on the facts and the documents. A lawyer can review the letter and your records, explain the options, and help you prepare a reply before the deadline.
This article is general information on Singapore law and is not legal advice. Rules and agency policies change, and every situation is different. For advice on your own circumstances, speak with one of our lawyers.
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